This application relates generally to use of wireless technology. More specifically, this application relates to performing transactions with a wireless device.
In recent years, there has been considerable market pressure driving the development of more versatile ways of performing transactions. This is evident in the development of transaction products that supplement traditional credit cards, such as debit cards, stored-value cards, private-label cards, loyalty-program cards, prescription cards, insurance cards, and the like. This development has been coupled with increasing pressures to address the potential for fraud, which has become of greater concern with the proliferation of new transaction products and with steadily more sophisticated techniques for committing fraud.
One example of the manner in which transactions are currently executed is illustrated with a credit-card transaction in connection with FIG. 1. A credit card may be issued to a customer by a financial institution such as a bank and typically displays a logo for an association that implements rules that govern aspects of use of the card. Account information is usually printed on the face of the card, specifying an account number and name of an authorized holder of the card; this information is also stored together with additional information on a magnetic stripe that is usually affixed to the back of the card. When the cardholder wishes to execute a transaction, such as a financial transaction for the purchase of goods and/or services, he presents the card 120 to a clerk at a merchant location, who swipes the card through a magnetic-stripe reader comprised by a point-of-sale device 108. Multiple point-of-sale devices 108 may have been provided at a variety of locations by an acquirer, who acts as an intermediary between merchants and the issuer financial institutions. As an intermediary, the acquirer coordinates transaction routing and performs a variety of backend processes.
The point-of-sale device 108 typically initiates a dialup connection to an acquirer system 112 through a network 104. A packet of information that includes information read from the magnetic stripe of the card, a merchant identifier, the date, and transaction amount are forwarded by the point-of-sale device 108 through the network 104 to the acquirer system 112. The acquirer system 112 may store some of the information and sends an authorization request to the issuing financial institution 116, which may be identified from a portion of the account number read from the magnetic stripe. The transaction is authorized or denied depending on such factors as the validity of the cardholder name, the validity of the card number, the level of available credit in comparison with the transaction amount, and the like. If authorized, an authorization code is routed back through the acquirer system 112, which captures additional information and forwards the authorization code back to the originating point-of-sale device 108 so that the transaction may be completed. Periodically, such as at the end of every day, the transactions are settled by the acquirer initiating funds transfers that fund merchant bank accounts with total transaction amounts that may have resulted from multiple transactions by multiple customers.
Other types of cards may operate with similar structures, although the details for each type of card are different. For example, use of a debit card typically requires that the customer provide a personal identification number (“PIN”), which must be validated before any authorization for the transaction can be provided. Authorization usually depends on the current level of funds actually in the identified account rather than on a credit level, and funds transfer is usually executed substantially contemporaneously with providing the authorization rather than performing periodic settlement. Other types of cards may use arrangements that have similar differences in their particulars.
The proliferation of various types of transaction instruments has resulted in consumers limiting their use of some instruments, in part because there is only a limited amount of space in each person's wallet or purse to carry the instruments and because of concerns that theft of the wallet or purse would result in loss of all the instruments. There is accordingly a need in the art for improved methods and systems for performing transactions.